Coleman, who signed a three-year contract worth $16.5 million less than a year ago, was due $5.5 million of total compensation in 2019.
New Orleans will save $4 million in cap space for 2019. Coleman will still count for $3 million against the Saints' salary cap.
The 30-year-old safety had his role diminished greatly over the course of the 2018 season. The Saints opted to use free safety Marcus Williams and strong safety Vonn Bell instead of Coleman.
Coleman saw action in all 16 games (nine starts) and recorded 36 tackles and a forced fumble on 359 defensive snaps.
The Saints originally signed Coleman last March after the Carolina Panthers cut him to create more cap space. He has 551 combined tackles, 2.0 sacks, 21 interceptions, 36 passes defensed and two defensive touchdowns across nine NFL seasons with the Philadelphia Eagles, Kansas City Chiefs, Panthers and Saints.